Newsom summons PG&E leaders to Sacramento. New energy ‘czar’ is a familiar face. Lobbyists increase spending to shape policy in Sacramento.
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Good morning, California.
“The conditions that we are observing right now are a function of climate change, and climate change will get worse.”—Stanford professor Michael Wara, to The New York Times in a story headlined: “Trump stymies California climate efforts even as state burns.”
Newsom to PG&E: Fix it or state will
Gov. Gavin Newsom is summoning Pacific Gas and Electric Co.’s leaders to Sacramento this week, and says the state will step in if California’s largest utility cannot resolve its leadership structure quickly.
With PG&E mired in bankruptcy, different factions of investors—hedge funds that hold equity and hedge funds that hold corporate bonds—are battling for control of PG&E.
Newsom has floated the notion of Warren Buffett’s Berkshire Hathaway entering the bidding, though Buffett has not responded.
On Friday, Newsom wrote in a Medium post that PG&E must resolve its leadership issues, and adds:
- “If the parties fail to reach an agreement quickly to begin this process of transformation, the state will not hesitate to step in and restructure the utility.”
William Johnson, appointed as PG&E’s chief executive officer earlier, has directed the utility to shut off electricity to millions of customers in recent weeks to avoid sparking fires during windy days, and has said California could face another 10 years of such shut-downs.
- Newsom: “PG&E must fundamentally change—starting with a total transformation of its culture and governance. Most importantly, those changes must begin now, ahead of next year’s fire season.”
PG&E’s job is to keep the lights on. But voters hold politicians accountable, as Gov. Gray Davis learned the last time PG&E went bankrupt and the state faced blackouts.
Newsom’s energy ‘czar’
PG&E and Puerto Rico’s antiquated Electric Power Authority have had a hard time keeping the lights on.
So Gov. Gavin Newsom’s selection of Ana Matosantos to oversee the restructuring of PG&E makes sense. Since 2016, she has served on the President Obama-appointed board overseeing the restructuring of Puerto Rico’s debt, and has specifically focused on the island’s troubled electric utility.
Matosantos serves as Newsom’s cabinet secretary. He is the third governor to turn to Matosantos to handle some of the most complex tasks facing the state.
She was finance director under Govs. Arnold Schwarzenegger and Jerry Brown during the worst of the recession, providing harsh numbers and stark choices as both governors dealt with knee-buckling budget gaps.
A Puerto Rico native and Stanford graduate, Matosantos is the rare public servant who can fluently discuss the intricacies of California’s budget in English and Spanish.
In the latest task, Matosantos will work with Newsom’s counsel, Ann Patterson, and energy and legislative advisers Alice Reynolds and Rachel Wagoner.
- Newsom described their assignment: “[G]ame out every option and prepare a plan should the state need to intervene. All options are on the table.”
The San Francisco Chronicle profiled Matosantos in this piece.
Meanwhile: The U.S. Supreme Court is considering whether the Puerto Rico oversight board appointments are legal. The Trump administration is defending the appointments.
Lobbying remains a growth industry
Corporations, unions, trade groups and other employers of lobbyists spent $298 million to shape policy in the first three quarters of 2019, a 6.8% increase over the first three quarters of 2018, reports filed with the Secretary of State show.
In the first three quarters of 2011, the start of Gov. Jerry Brown’s time in office, employers spent $220 million on lobbying, 35% less than in the first three quarters of Gov. Gavin Newsom’s tenure.
The biggest spender so far this year has been the Western States Petroleum Association, at $6.6 million, followed by the California Teachers Association, at $6.2 million. They are among the perennial leaders in lobbying spending in Sacramento.
- The teachers’ union was especially successful in 2019, shaping legislation that restricts charter public schools, most of which are nonunion.
The top-billing lobby firm was Capitol Advocacy at $6.4 million. It has an array of clients, including Pacific Gas & Electric, hospitals, retailers and DoorDash, which was affected by legislation restricting gig economy companies’ use of independent contractors.
Trump’s loss is California’s gain
President Donald Trump’s administration must pay California $845,908 in attorneys fees, after the administration lost its attempt to require people answering the 2020 Census to state whether they are citizens.
California Attorney Xavier Becerra successfully sued Commerce Secretary Wilbur Ross over his attempt to require the citizenship question, contending inclusion of the question could scare away people from participating. That could have resulted in an undercount in California, home to millions of legal and undocumented immigrants, Becerra contended.
The U.S. Supreme Court rejected Trump’s appeal in June, opening the way for Becerra to pursue attorneys’ fees. The feds settled late last week by agreeing to pay the state $845,908, Becerra’s office said.
- The Los Angeles Unified School District, which also sued, will collect another $123,145.
- Oakland will collect $14,119.
- San Jose and the Black Alliance for Just Immigration also are seeking to recover their costs.
Bottom line: The feds are out $983,172, and counting.
Twitterer-in-Chief trolls Newsom
As firefighters worked to contain fires that killed three people and damaged or destroyed 727 homes and businesses, President Donald Trump trolled California on Sunday, criticizing Gov. Gavin Newsom in tweets for what he claims is “a terrible job of forest management.”
Facts? The most recent fires burned expensive homes, brush and farmland, plus Sonoma County wine country, not forests, as The L.A. Times’ Shelby Grad writes.
Details aside: Trump tweeted threats to withhold federal disaster aid:
- “Every year, as the fire’s rage & California burns, it is the same thing-and then he comes to the Federal Government for $$$ help. No more.”
Newsom had thanked Trump last week for quickly responding to California’s requests for emergency federal aid.
On Sunday, Newsom tweeted back at Trump, and later issued a statement:
- “We’re successfully waging war against thousands of fires started across the state in the last few weeks due to extreme weather created by climate change while Trump is conducting a full on assault against the antidotes.”
Take a number: 364
On this date next year, 364 days from now, will be the day after the general election, and we should know whether Donald Trump has won reelection or not. You can check on the status of your voter registration by clicking here.
Commentary at CalMatters
Darby Patterson, writer in Pollock Pines: Sitting in the dark for seven days, we respect Mother Nature but resent PG&E for not keeping up with maintenance. Of the seven days, we had one day of big wind up in Pollock Pines. It was a day to be grateful PG&E’s neglected power lines were not providing us service.
Dan Walters, CalMatters: A new report, timed to coincide with two tax increase proposals, contends that more money is needed to improve California’s schools. But is it true?
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